Elering to enter into 140-million-euro synchronization financing agreement with European Commission

On Tuesday, Elering is to enter into an agreement with the European Commission for channelling more than 140 million euros from the Connecting Europe Facility (CEF) into the first phase of the synchronization of the Estonian electricity system with the continental Europe frequency area.

The first phase of investments into synchronization and the previously decided Balticconnector project are unique as they will be supported at the maximum permitted co-financing level, 75 per cent. “In the seven years, Elering and its partners have raised close to 560 million euros in European Union funds for strategic energy projects. That amount is on top of the general support package allocated to the Estonian state,” said Taavi Veskimägi, chairman of the Elering management board.

The financing agreement will allow Elering to announce, in the near future, the first procurement for design work for the renovation of the 330-kilovolt lines that run from the Narva region to Latvia via the Valga area. The first construction procurement is set to take place next year and construction activity will go ahead in winter 2021.

In the course of the project, Elering will renovate the Balti-Tartu, Tartu-Valmiera and Viru-Tsirguliina 330-kilovolt overhead lines, upgrade control systems and build new voltage stabilization equipment, including Estonia’s first synchronous compensator. The renovation of the lines will increase the transmission capacity between Estonia and Latvia by 700 megawatts.

Elering and the Latvian and Lithuanian TSOs AST and Litgrid will invest a total of about 430 million euros into the first investment phase of the synchronization project, of which 323 million euros will be covered by the EU’s CEF fund. Estonia’s share of the investments is 187 million euros. Estonian power consumers will not pay for the investments In Estonia as in addition to the CEF support, Elering will also invest the proceeds of auctions of cross-border transmission capacities.

The Baltic states’ goal is to synchronize their systems with the continental Europe frequency area by the end of 2025.